Last month, Seth Chandler, a law professor at the University of Houston and one of the leading experts on insurance regulations, started blogging on the Affordable Care Act at ACA Death Spiral. It makes for sobering reading. Most recently, Chandler highlighted privacy concerns regarding California’s decision to release the private information of health insurance consumers who’ve visited the Covered California insurance exchange to insurance agents, in the hope that the agents would be able to convince consumers to enroll. But Chandler has shed light on a number of other subjects as well, including the legal questions surrounding the Risk Corridors program, the increase in enrollment that will have to occur for the exchanges to meet their enrollment projections, and what might happen to the exchanges if roughly 2 million people enroll, as opposed to the 7 million the federal government had anticipated:

It’s time to start thinking realistically about what happens if a core component of the Affordable Care Act, subsidized, non-underwritten health insurance available from private insurers, essentially fails to provide many with better access to medical care. This might not happen in every state — there might be a few whose Exchanges can be deemed “successful” — but it is looking more and more to me as if we are heading for enrollments in many states well, well short of that on which the arguments for the ACA were significantly premised.

Chandler introduces the possibility that we might see a net decrease in the number of Americans with private health insurance under the 2 million scenario:

[I]f 2 million obtain insurance through the Exchanges but more people (3.5 million is a prevailing estimate from sources ranging from Forbes to Jonathan Gruber) lose their current individual health insurance, that’s a net decrease in the number of insured. And if we add in the loss of 100,000 or so people from the Pre-Existing Condition Insurance Plan that likewise is terminated or those who heretofore were in various state high risk pools, there is a serious risk that the Affordable Care Act will have decreased the number with private health insurance.

In fairness, I have not taken Medicaid expansion into account. Some may see it as unfair to count just the number of people with private health insurance rather than the number with access to health care through private insurance or public schemes such as Medicaid. And, indeed, in those states in which Medicaid has been expanded — one can’t blame President Obama too much if other states choose not to participate — enrollment has outpaced enrollment in private plans at about a 4-to-1 ratio. This suggests, by the way, that people are willing to use a web site, even some clunky ones, to sign up for health care if they think the price is right.

The rejoinder to the argument that we should consider Medicaid, however, is that an awful lot of political energy and an awful lot of monetary investment has been predicated on healthcare reform benefiting more than just the poor but the middle class too. If it turns out the middle class has, net, been hurt by the 2014 features of Affordable Care Act or has paid a large investment for the 2014 features of a law that, net, does provide little marginal benefit, it’s fair to criticize the 2014 features of the Act for their architectural shortcomings. And, yes, I know all about staying on your parents’ policy until you are 26 and limitations on rescissions, but none of those pre-2014 “achievements” should count in assessing the 2014 record.

Chandler suggests that while some consumers might find that their new policies are of higher quality than their old policies, others might find that the health insurance that had been tailored to meet their needs and their budgets is no longer available to them, and that the options available to them, even taking subsidies into account, are unacceptable expensive. He also suggests, however, that if the exchanges enroll no more than 2 million, the federal government will save a nontrivial amount on premium subsidies:

The Congressional Budget Office assumed that premium subsidies would be $26 billion in 2014, representing a payment of about $3,700 per projected enrollee. If the distribution of policies purchased and the income levels of purchasers are as projected, but only 2 million people apply, that would reduce subsidy payments down to $7.5 billion. And if the policies sold in 2014 cost a little less than projected, that might further reduce subsidy payments. I think it would be fair, then, to estimate that low enrollment could save the federal government something like $19 billion in premium subsidies in 2014. This savings coupled with heightened tax revenue under 26 U.S.C. §5000A [the federal mandate penalty] — could we round it to $20 billion — would be more than enough to cover insurer losses resulting from the pool being smaller and less healthy than projected.

I would be eager to read a 2 million scenario that unfolds more favorably than Chandler’s, as he makes a convincing case that “the Affordable Care Act might not die in 2015 with a giant imploding bang but rather limp on with a whimper.”